Mr. G. E. LEIGHTY,

INTERSTATE COMMERCE COMMISSION,
Washington, D.C., June 7, 1966.

Chairman, Railway Labor Executives' Association,
Washington, D.C.

DEAR MR. LEIGHTY: Your letter of April 1st, previously acknowledged, has been given careful consideration and the spirit of public interest in which it was written is appreciated. Your views and recommendations on the various subjects discussed will be studied and weighed in reviews of policies and procedures involved. However, a number of points mentioned by you require our comment at this time.

A principal proposal made in your letter is that the Commission undertake an investigation into its reporting and statistical activities, prefaced by a public hearing open to railway patrons, employees, and managements, as well as to governmental agencies.

The Commission's reporting and statistical programs are subject to continuous review and change. Over the years, many revisions of reports have been made, and new reports programs have been instituted to keep the Commission, the government, and interested parties informed regarding the ever-changing transportation industry.

As is inevitable in reports and statistical programs, the time arrived when it appeared appropriate to review the Commission's activities in this area with the objectives of (1) re-evaluating the needs for transportation data, (2) assuring that such needs are adequately met at minimum burden to the government and industry, and (3) maintaining reporting programs at levels consistent with the essential information needs of the Commission and other vital interests. The Commission established a Staff Committee on Reduction of Paperwork Burden in October 1959. The success of this review program was attested by the commendations received during the Congressional investigation of the Federal "Paperwork Jungle." Recommendation 6 of House Report No. 1700, Committee on Post Office and Civil Service, 87th Congress, 2nd Session, stated that other transportation agencies should undertake similar self-evaluation programs, with a view to reducing excessive and unnecessary reporting requirements and to applying the resulting savings to the correction of existing gaps in information.

As you are aware, programs such as that instituted by the Commission are in accordance with Executive and Congressional policy that all possible measures should be taken to reduce the paperwork burden of reporting to the Federal government. The primary object of the reports review program was not to save money for carriers but to examine how needs for appropriate and timely data could best be met. Any resultant reduction in reporting and publications programs was incidental to the prime purpose of the review.

In consideration of the needs for information, we took into account the interests of other government agencies, the Congress, the general public, labor, and industry, as well as those of the Commission. In some cases where Commission publications were reduced, it was a matter of eliminating duplications. In most other cases where continuous general publication did not appear to be warranted, the data are still available to those interested directly from carrier reports.

While we do not believe that there are sufficient compelling reasons to require general public hearings at present, we desire to assure you that we will give your suggestion careful evaluation and consideration.

The enclosed contains our comments under appropriate headings with respect to the specific suggestions and criticisms contained in your letter.

Sincerely,

Enclosure.

APPENDIX

JOHN W. BUSH,

Chairman.

REPORTING ACCIDENTS, CASUALTIES AND EQUIPMENT DEFECTS AND FAILURES Because of the limited resources available, it is not possible for the Interstate Commerce Commission to make a complete audit of each railroad's accident and casualty files. Hence, of necessity only spot checks of these records are made. During the fiscal year ended June 30, 1965, field personnel of the Bureau of Railroad Safety and Service reviewed 25,573 such accident and casualty files and found a total of 32 infractions. These 32 infractions were referred for prosecu95-388-68-27

tion. This compares with 21,679 instances of accident or casualty files reviewed during the previous year when 22 infractions were noted and referred for prosecution.

This method of enforcement of the Accident Reports Act has proved its effectiveness because as a general rule our spot checks disclose the fact that most railroads file timely, correct and complete monthly reports of railroad accidents. Whenever we find a carrier consistently reports some of its accidents late, we take appropriate action to get compliance by bringing the late reporting to top management's attention by correspondence and/or conference. When these methods fail to produce timely reports, enforcement action is instituted.

During recent hearings before the Senate Committee on Commerce relating to administration of Public Law 88-108 (Railroad Work Rules Dispute), a representative of the Brotherhood of Locomotive Firemen and Enginemen testified that nearly 100 recent accidents had not been reported to the Commission. After this testimony was presented, on request of the Bureau of Railroad Safety and Service, he identified each of said alleged non-reported accidents. This is apparently the "illustrative evidence * * * offered to the Commission ***" referred to in the letter of April 1, 1966. On receipt of this information, it appeared about one-half of the incidents were clearly not reportable. The remaining 47 incidents were investigated by our Safety and Service Agents. Of these, 5 accidents were deemed reportable and evidence of violation in each of said 5 instances was obtained for prosecution.

In 1965 substantial delays were experienced in date of issue of the Statement M-400, Summary of Accidents Reported by All Line-Haul and Switching and Terminal Railroad Companies, and the Accident Bulletin. These delays resulted from conversion of the Commission's accident record keeping to electronic data processing which replaced the Commission's earlier automatic data processing system first applied to accident data in January 1962. Similar delays were experienced in publishing the M-400 and other accident data while adapting the earlier system to accident reporting data. The present electronic data processing was adopted to more efficiently and economically meet the Commission's responsibilities. When this system is fully operative, the accelerated publication dates and greater accuracy because of built-in checks in the programming will outweigh the temporary delays experienced during the installation and adaptation.

The delays in release of the M-400 during 1965 were substantial for the foregoing reasons. We are now reducing the delay and we are confident that the serious time lag in release of M-400 material will be overcome in the near future. Statement M-450, Preliminary Report of Railroad Accidents and Resulting Casualties, is a publication based upon information supplied by carriers on their form V reports. These M-450 reports are on a current basis. The February 1966 M-450 report was released on April 19, 1966. Since reports of accidents occurring in March 1966 are not due to be filed until April 30, 1966, the M-450 for March could not be compiled until after that date. The M-450 report is usually released between 10 and 15 days after the due date of filing.

The M-450 is intended to reflect preliminary accident data for the month covered. The data have been neither verified nor corrected. However, a comparison of accident data as shown on the M-400 and M-450 reflects a remarkable similarity in trend, though the number of accidents shown on the M-450 is usually less than the total shown on the M-400 for the same month. The practice of showing on the M-450 the preliminary data for the current month and the final figures for the corresponding month in the preceding year from M-400 was adopted solely to reflect promptly the accident picture of the two years long before it is possible to provide detailed, verified, and corrected data for the current month. No direct comparison was intended or possible because the M-450 data are preliminary.

However, since the comparison of preliminary statistics with final statistics may give an erroneous impression of accident trends, we are taking steps to revise the M-450 report form so as to eliminate final statistics shown for corresponding months of the preceding year. The revised report would show only preliminary data.

Although the Annual Reports of Locomotive Inspection for fiscal years 1961, 1962, 1963, and 1964 were dated October 3, 1961, December 3, 1962, December 2, 1963, and December 2, 1964, respectively, these reports were released on January 10, 1962, January 6, 1963, February 4, 1964, and January 25, 1965, respectively. Thus the date on the report has no significance as to when the data therein became available to the public. It was for this reason that no date was shown

in the 1965 report. This latter report was delayed in release because of Government Printing Office printing schedules. Also, in the interests of economy no accelerated printing schedules have ever been ordered. An earlier release date could be attained only at substantially greater cost by special handling and printing.

After careful analysis of the cause of accidents resulting from defects of locomotives, the former Director of Locomotive Inspection concluded it was most difficult to relate previously reported defects with the particular defect involved in an accident. Thus to assure thoroughly factual reporting, he determined that reference to previously reported defects be deleted from the 1962 report. On the basis of that decision, information relating to previously reported defects has not been included in subsequent annual reports relating to locomotive inspection. As indicated previously, delays have been experienced in electronic data processing of accidents statistics. These delays were reflected in the release dates for the M-400, M-450 and the Accident Bulletin. Much improvement is noted in processing accident data in recent months. Complete Accident Bulletin data for year 1964 were first available on May 25, 1965, when the December 1964 M-400 was completed. The 1964 Bulletin was released on May 11, 1966, as compared with August 3, 1965 for the 1963 Bulletin. To further improve the situation, processing for the Accident Bulletin is now being transferred to the Commission's electronic computer and very substantial improvement can be expected in the release date for the 1965 Accident Bulletin.

RAILWAY SERVICE

You state that a major contributing factor to the dissatisfaction of the public with railway service has been the abandonment of railway lines, the discontinuance of trains, the closing of railway stations, and the curtailment or elimination of important elements of both freight and passenger service. All matters of this type have been handled in accordance with Federal or State laws, and the public, including labor organizations, has entered appearances many times to present reasons for continuing service. Consideration has been given to the views of the public, labor, and other protestants by the governing body when reaching decisions.

As to the need for a "general national survey" in this area, let me assure you that the Commission is fully cognizant of the national importance of essential rail freight and passenger services. As you know, we are cooperating to the fullest extent possible with the Executive Branch in its efforts to deal with rail passenger problems, where they exist, in the interest of regional and national users. In this regard, you will recall the discussions held between representatives of the brotherhoods and members of the Commission some months ago as to ways in which these problems might be resolved.

A system of reports such as you suggest at the same point in your letter already exists in this area. Miles of road operated are included in quarterly and annual publications of the Commission and miles of road abandoned and constructed are shown in Table 13 of our annual Transport Statistics. Train discontinuances under section 13a of the Interstate Commerce Act are reported in Finance Table 4 of appendix B of the Commission's last two annual reports to Congress and in the text of the reports for a number of prior years. Abandonments of freight stations are published in the Open and Prepay List of Stations, a tariff publication. Information concerning individual abandonments, discontinuances authorized by the Commission, and mergers are freely given to the public upon request to the Section of Finance of the Commission's Office of Proceedings. Orders of the Commission in these matters are always made public, Other information concerning road abandonments and construction are available in periodic reports filed with the Bureau of Accounts.

The Commission has not included information as to State Commission-authorized train discontinuances as they are not within our jurisdiction. Inclusion of train discontinuances authorized by State commissions in future Commission reports is a matter to be considered.

The Commission in Dockets 32141 (302 ICC 735) and 31954 (306 ICC 417) investigated the Rules for the Separation of Railroad Operating Expenses between Freight and Passenger Services, and the Railroad Passenger Train Deficit. The Rules were found to be adequate for their designed purpose, i.e., a standard statistical measure of operating results. These rules were updated and reissued effective January 1, 1964. The Commission on March 1, 1966 denied a petition to reopen the railroad passenger train deficit investigation.

RAILWAY OPERATIONS AND FINANCES

This section of your letter recites statistics with respect to car ownership and capacity of the freight car fleet owned by class I railroads. It is assumed that you intended to indicate that the roads paid $425 million in net equipment rentals in 1965 and not 1966. We are advised by the Association of American Railroads that this is approximately the amount estimated by it for the year 1965. As railroad annual forms were not received here until about the end of March, we do not have any compilations at this time from those reports. In 1964, the latest year for which the information has been compiled, net equipment rentals paid to individuals and companies not carriers, including private car lines, were $350 million. Included in this amount were $24.4 million for hire of highway trailers and $5.6 million for hire of auto racks, neither of which types of equipment were of significance in 1950, the earlier year against which you made your comparison. As you are aware, a large part of the equipment for which railroads pay rentals to noncarriers are of special types intended for particular kinds of service. For example, refrigerator cars on which railroads pay mileage when in actual use are seasonally stored well in advance of use to take care of peak loading periods of perishable products, during which time no mileage payments are made to the owners.

Persons furnishing cars to railroads, other than railroad owned refrigerator car companies, file a brief annual report with the Commission. These companies are not subject to a Uniform System of Accounts prescribed by the Commission. Some of the reports may indicate railroad control by the names and addresses of officers, but the railroads' annual reports Form A indicate railroad investments in such companies.

In 1964, the latest year for which data are available, 154 private car lines owning 10 or more cars reported investments in transportation property, less reserve for depreciation, of $1,440,197,541. Operating revenues reported were $356 million, operating expenses were $248 million, and equipment owned by these companies totaled 286,111 cars of various types. When compared with the investment, revenues, expenses, and number of freight cars of class I railroads, these amounts are relatively small. The difference between operating revenues and expenses, before taxes, amounting to $108 million for 154 car lines and representing a 7.5 percent return on net property investment, does not indicate an excess-profit industry. For the seven refrigerator car lines owned or controlled by railroads, the parallel rate of return was 12.9 percent.

As the ownership of private car lines can be identified through railroad reports to the Commission, it is suggested that specific examples of excessive charges paid by railroads be brought to the Commission's attention. The Commission has always been willing to institute investigations of carrier practices upon the presentation of sufficient factual information to justify such action.

INTERMODAL TRANSPORTATION COMPETITION

It is stated at page 5 of your letter that there are two aspects of this subject, the first of which is with respect to ownership or control by the railways of companies engaged in other forms of transportation and that a major part of this intermodal operation is in the control of truck lines by railways.

The railroads are required to report in their annual form A's filed with the Commission their investments in affiliated companies, investments in other than affiliated companies, and investments owned or controlled through nonreporting carriers and noncarrier affiliates. These schedules were used by the Bureau of Transport Economics and Statistics in its studies of motor operations by and for railroads in 1944 and 1948, the results of which were published in Statements Nos. 4829 and 5321. One purpose of these studies was to ascertain the extent of railroad ownership in motor operations.

Statement No. 5321 shows as pages 7 and 8 and in appendix M the financial interests of railroads in motor carriers. In 1948, class I railroads had investments in motor carriers of all classes, either directly or through subsidiaries, of $71,593,000. This sum included $25,750,879 representing the portion of Southern Pacific Company investment in Pacific Electric Railway Co. allocated to motor passenger operations on the basis of the ratio of revenues from bus operations to revenues from all operations. Excluding the investment in Pacific Electric Railway because that line was not included in motor carrier statistics, the railroad investment in motor carriers in 1948 was 9.8 percent of owners' equity of all class I motor carriers engaged in intercity service.

From railroad replies to circular questionnaires, these studies indicated that the percentage relationship of rail-motor vehicle-miles in property operations to class I motor carrier property operation vehicle-miles was declining as follows:

The above data represented the direct operations of the railroads, the operations of controlled motor carriers, and operations by uncontrolled motor carriers in substitute rail service. When the vehicle-miles of independent operations (not connected with railroad service) of railroad controlled motor carriers were added to the vehicle-miles of operations by or for railroads, the percentage relationship of the total to class I motor carrier property operation vehicle-miles in 1948 became :

Reports of independent operations of railroad-controlled motor carriers were not obtained in 1944.

As you know, there has been a vast increase in operations of motor carriers of property and motor carriers of passengers since 1948. Since that date, the railroads have sold much of their investment in motor carriers of passengers. In view of these facts and the small share of railroad operations relative to the total, as revealed by the 1944 and 1948 studies, the Commission has not felt the need for a new study would justify diversion of resources required from other more significant projects.

This conclusion is further substantiated by a comparison of ton-miles and passenger-miles operated by railroads and for them by others, as reported in their Annual Reports Form A. Highway vehicles in railroad services operated by railroads in 1963 provided approximately 17 million ton-miles of service, and vehicles operated by others in railroad service provided almost 102 million ton-miles. The total of these two types of operations were only 0.035 percent of the 331,800 million intercity ton-miles estimated for motor vehicle service in that year.

Passenger-miles operated by railroads in motor service and for them by others were approximately 7 million and 25 million respectively in 1963. Passenger-miles operated by motor carriers of passengers are estimated to have been 21,917 million. The amount in railroad service was equal to 0.001 percent of the total of motor carriers of passengers. The data for these comparisons appear in table 36 of part 1, Transport Statistics in the United States, 1963, at page 2 of Transport Economics, January 1966, and at page 59 of the Commission's 79th Annual Report to Congress.

Your letter states that the Commission could serve the need for information about existing coordination of transportation systems by a detailed study of joint traffic, including rail-controlled motor carriers as well as the actual total movement of trailers now being "piggybacked," and second, by a new continuing separate report of traffic and operating results of motor, water, and pipeline carriers connected with railway carriers. As you no doubt are aware, the Commission, by its order in Docket No. 34364, Piggyback Traffic Statistics, is securing reports from carriers on this subject. Information obtained therefrom has been published in Transport Economics for October and November 1965. Information concerning the use of containers appeared in the March 1966 issue.

Present limitations on funds and staff are such that it is not possible to compile and publish a new separate report of traffic and operating results of motor, water, and pipeline carriers connected with railroads. However, reports of such carrier operations are available in the public reference room of the Bureau of Accounts for anyone who desires to utilize them.

The second aspect of this subject refers to alleged defects in Commission compilation of intercity ton-miles representing intercity freight traffic transported by the various modes, which are commented on individually, as follows:

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